Do we need storage for renewables?

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 If an individual household wishes to go off grid, the cost of ensuring 100% supply security is very high at current battery prices, because to provide 100% supply security means you have to allow for a complete absence of sunshine or wind for several days in the area where your house/farm is.  It may be windy or sunny 100 km away, but that doesn't help you.   For the grid as a whole, this is much less true. The grid acts as a pseudo battery because varying demand and supply are averaged out across the whole grid. You don't turn on your heating at the same time as your neighbour does. Your solar panels don't produce electricity at the same time as the panels in a town 100 km away.

But the fact is that all supply is variable. Most ppl opposed to renewables because of their "variability" ignore the fact that hydro for example is also variable. Even wet countries like Norway or Scotland can have droughts.   And coal and nuclear power stations need to be periodically shut down for maintenance, or go off line because of accidents.  Also, all demand is variable too. The daily fluctuations in demand are substantial.  Even the hour-to-hour and minute-to-minute demand variations can be large.

Yet the grid has been coping with that for 100 years. It does this by good planning, and because the variability of many diversified and varied suppliers and consumers is greatly reduced when they are combined, and also by oversupply.  Grid operators buy more capacity than they need, to ensure there are no blackouts.  The principle of diversification is the same as reducing fluctuations in a portfolio by holding different stocks from different sectors.

So, you don't in fact need to back up each and every individual windmill and each solar panel with old-fashioned baseload power.  Which means you don't have to include the cost of storage into the cost of renewable electricity unless you have undiversified supply sources or renewables rise above some percentage of the supply. 50Hertz, the former East German grid operator, reckons that limit is 70%, and they are already at 50%.

But even were this not true, the cost of storage is plummeting. The annual decline in the cost of lithium-ion batteries as just one example of storage, is about 23%, a trend consistent over three decades. This means that in 5 years, storage will be about 75% cheaper than now. Currently, the Tesla Powerwall battery (designed for household, not utility use) has a LCOE of about US 13.5 cents per kWh. If battery costs continue to decline, the cost of stored electricity will be about US 3.5 cents per kWh in 5 years' time. The costs of large-scale Tesla batteries for utilities or businesses is (according to reports; no pricings have been officially released) about half the small scale pricing. Storage is already cost effective for peaking power (the 2 or 3 hours a day when demand is greatest).  It will soon be useful for storing solar power from the midday insolation peak for evening use.   Note also that you can manufacture "synthetic natural gas" using the Sabatier process so that even gas peaking power plants could potentially be green.

In addition, variable costing will stabilise demand. Most electricity tariffs globally set fixed retail prices whereas wholesale prices can fluctuate dramatically. Many activities can be postponed or rescheduled to take advantage of lower wholesale prices. For example, in Australia we have had several occasions when wholesale prices have been negative: a good time to heat your water, charge up your batteries or your EV, if that were reflected in the retail charges.  A Tesla electric car stores enough electricity (a usable 75 kWh) to power an average US house (using 10.9 kWh per day, 2014 data) for nearly a week. As EVs spread, they will become part of the grid "backup", charging when prices are low, releasing power when they are high.

That favourite of climate change denialists, nuclear power, doesn't actually solve the problem of variable demand, although it does make supply (on average) more stable.   And nuclear power stations and the power they produce are horribly expensive, even with large subsidies.   Worst of all is the lethally toxic by-product, plutonium,